In a previous post I wrote about why the UK’s Labour government changed its approach to competition policy and what this meant for the CMA. In this post I want to look at the opposition benches and consider what a Conservative or Reform-led government could mean for antitrust.
The starting point is to remember that competition is unlike many other areas of policy because the main divides tend to run within the parties rather than between them. On the left, there are some (including in the trade union movement) who would happily give competition a back seat to an active industrial policy, while others favour vigorous competition law enforcement to protect vulnerable consumers.
On the right, there are four areas of possible tension.
Pro-market vs pro-business
The first – and historically the most significant – is between being pro-market and pro-business. In the 1980s, the Thatcherite free market revolution did not necessarily mean doing what big business wanted. Mrs Thatcher’s favourite Trade and Industry Secretary, Nicholas Ridley, recounted that government’s approach in his memoirs:
Competition policy was progressively tightened. Competition was given a higher priority than company size. The concept of allowing large industrial companies to form so that they could become successful competitors on the world industrial scene was abandoned. What such companies actually did was to merge with all their domestic rivals, and then seek to exploit the British market from a monopolistic position. In theory international competition was available, but it was hard to mobilize it because political lobbying was employed to prevent an overseas company securing a major British order. ‘British jobs are at stake’ or ‘We cannot buy foreign-made defence equipment’ were telling pressures, especially when the order came from the Government or a nationalised industry. Most large companies did not prove themselves to be star performers on the world scene. (1)
Another Thatcher favourite to hold the trade and industry portfolio was David Young and he took a similarly pro-competition and pro-consumer view. As he put it, “My job was to ensure the growth of competition. This was invariably unpopular with the managements of companies, for the real beneficiary would be, not them, but the ultimate consumer.” (2)
A different conservative approach came from Michael Heseltine, who held the same portfolio under the premiership of John Major. He was mainly concerned about competition when the customer involved was the government – for example in the case of defence procurement (3) – or businesses, when it came to access to finance (4). Beyond that, the protection of British consumers was a lower priority for him than the international competitiveness of British businesses.
Heseltine believed “the competition authorities…must be flexible enough to recognise the realities of today’s business world.” For him the three key realities were the globalisation of industry; the need to create players big enough to take on the foreign competition; and the pace of technological change with its effect of overturning market power (5). This led Heseltine to reject the advice of the Office of Fair Trading to investigate some potentially problematic mergers (6). To competition enthusiasts, this approach feels very like the promotion of national champions, which Ridley and Young worried about.
Economic policy vs political strategy
A second area of tension is between economic policy and political strategy. Leading figures in both the Conservatives and Reform are strong supporters of lower taxes and less regulation, and they have generally been sceptical about state intervention and redistribution. However, if they are to win a general election they will need the support of voters on average incomes whose economic instincts are much less favourable to the free market.
At present, this tension comes most immediately to mind when thinking about Reform, given their success in winning greater support in traditional Labour areas. But there is in fact a long tradition of right-wing governments backing interventionist policies in order to build a wider electoral coalition over the longer term. These policies have included strengthening worker protections (Peel), widening the franchise (Disraeli), building council houses (Macmillan) and managing demand to promote employment (much of the post-war era pre-Thatcher). These moves were crucial in enabling the Conservatives to be a nationally successful political party and they suggest that the challenge facing Reform today is neither as novel nor as insurmountable as may be thought. Parties that win elections are generally happy to sacrifice some ideological consistency in order to reach a wider pool of voters.
Historically, competition policy has not featured much in these calculations because there are simply not enough people who are interested in it. Talking about competition does not tend to be a good way of reaching floating voters. However, public opinion about big businesses and their power is changeable and there are periods when it becomes more politically salient. After last year’s election, James Frayne produced a report for the Centre for Policy Studies, Common Ground Conservatism, which considered public opinion on a range of issues, including on business:
On business and entrepreneurship, opinion ebbs and flows. At present, and since the cost of living crisis, there is a sense among many voters that businesses had a ‘good crisis’ because it gave them the excuse to raise prices and increase profits, at the expense of their customers. Many voters have the same suspicions about the pandemic.
However, just a few years ago, in the first few years after the Brexit referendum, there was a surge in sympathy for the demands of businesses – because there was great fear businesses would up and leave Britain.
In an environment where concern about corporate power, pricing or other behaviour increases, a Reform-led government may well want to see tougher enforcement of competition or consumer protection law, and perhaps the introduction of tougher regulation in some areas. The party’s deputy leader, Richard Tice, hinted at this recently when he accused the current Labour government of “handing control of our digital economy to foreign ‘Big Tech’ monopolies.” He went on to say, “Brexit gave us the power to set our own digital rules and we’ve built a world-class digital competition regime. But instead of backing British innovation, ministers are telling the CMA that monopolistic platforms come first.”
Competition policy vs foreign policy
This leads to the third area of possible conflict, which is between a country’s domestic competition policy and its international alliances. It is one thing for a government to support robust competition enforcement when the targets are domestic incumbent firms and the beneficiaries are overseas companies seeking to enter the British market, as in the 1980s. But it is quite another when the enforcement is directed against firms from overseas, especially from countries that are powerful international allies of the UK. The Conservative government of Rishi Sunak was increasingly troubled by the CMA’s activist approach to US big tech firms, including its decisions to prohibit Microsoft’s acquisition of Activision in 2023 and to investigate several of the firms’ partnerships with AI companies. It is fair to say that Sunak’s disquiet would have been even greater if the US administration at the time had been led by Donald Trump, with his aversion to “foreign” governments taking action against American companies.
A Reform-led government would face its own version of this dilemma. Populist parties have tended to stand up for domestic consumers and smaller businesses against larger overseas firms and, as mentioned above, Reform has occasionally appeared to back tougher regulation of big tech. However, this sits very uneasily with the efforts of Reform’s leader Nigel Farage to ally himself with Mr Trump, and it is not clear that an aggressive approach would survive a personal request from Mr Trump to change course.
Independence vs democratic accountability
The fourth tension is between the independence of competition authorities and democratic accountability. Over the past forty years Conservative governments in the UK have played a key role in setting up independent regulators and giving them the status of “non-ministerial government departments” with a high degree of insulation from political interference. However, as I have written elsewhere, this tended not to be out of a commitment to independence in principle, but because regulatory independence was a tool to achieve another policy objective, usually around winning investor confidence. If investors no longer demand regulatory independence, support for it on the right is likely to weaken, and conservatives are likely to return to their traditional prioritisation of parliamentary sovereignty and the belief that those exercising power under the royal prerogative or under statute should be properly accountable to parliament, through ministers. This shift was already well on its way under the governments of Boris Johnson, Liz Truss and Rishi Sunak, with ministers becoming increasingly concerned that the CMA’s policy agenda ran counter to that of the elected government, and feeling that action had to be taken to bring the regulators more widely to heel.
With Reform, the prioritisation of democratic accountability is likely to be even greater. Nigel Farage said recently, “Most of the authority is being transferred to regulatory authorities and quangos who make the real decisions, it seems, that affect people’s lives,” he says. “I think we’re stuck with a completely outdated mentality. The government has to be in the House of Commons. Why? I’ll tell you why. Accountability.”
The increasing importance of this issue to policymakers on the right should not be underestimated. It can be easy for officials at the CMA or other regulators to think of interest from politicians as invariably reflecting one of three things: short-term news management, party-political considerations or interest-group lobbying. All three would strike them as illegitimate, and instead the experts should just be allowed to get on with their job.
But from the standpoint of many Conservative and Reform politicians, there are two problems with this strict approach to technocratic independence. First, it leaves the technocrats in charge of some major policy trade-offs (such as those mentioned in this article) for which they may not be not qualified and have no democratic mandate. Second, the strict approach to independence appears to have affected whole swathes of government in recent years and been to the detriment of good policymaking.
An example of the latter view can be seen in the recent first-hand account of education reform by Nick Gibb, the long-running Schools Minister under the last Conservative government. Mr Gibb is no populist but he does not hide his frustration at quangos that he felt were not only making technical decisions, for example about the conduct of exam boards, but also making broad policy judgments on contested ideological issues like the content of the curriculum. He criticises Charles Clarke, Education Secretary under Tony Blair, for saying “it was a point of principle for him not to interfere with the independence of the QCA.” (7) Gibb could not work out what the principle was, but school standards appeared to be declining and they only rose again after ministers intervened and introduced a widespread programme of reform. Now, I do not know enough about education policy to judge who was correct in this controversy but it reflects an important and growing strand of thinking among policymakers and it is not solely confined to populists. If those who defend competition authority independence treat it as axiomatic and cannot explain clearly which decisions should be taken independently, why that should be the case, and how democratic accountability will be maintained, they will not get very far with the Conservatives or with Reform.
Policymaking in opposition
How these tensions will be resolved remains uncertain due to some of the characteristics of competition policy-making. A political party in opposition has got three jobs to do: win the next election; plan for what to do if it does win the election; and, in the meantime, hold the current government to account. It also has very limited resources with which to do these things and so it has to prioritise its activity quite ruthlessly. Since the number of electors who decide their vote on the basis of competition policy is very small, opposition parties have little incentive to do detailed policy development work on it before an election.
Occasionally a controversy will arise – for example as in January this year with the departure of the CMA Chair – which forces the main opposition party to take a position on an issue, but this tends to be done very quickly and at a high level. It is not necessarily a good guide to how the party would behave in a comparable situation if it was in power in future.
This in turn means that the opposition parties themselves might not be able to predict accurately their future behaviour. For example, when Labour was in opposition, it supported tougher competition enforcement and more powers for the CMA, but I warned at the time that this was unlikely to last and that tensions would emerge once the party got into government. For the Conservatives and Reform too, we cannot necessarily take policy statements today as a clear guide to their behaviour in three or four years’ time.
Notwithstanding all this uncertainty, there are some clues as to how the Conservatives and Reform might handle these tensions. For example we can look at the approach currently being taken by the Trump administration in the United States. I recently talked to Assistant Attorney General Gail Slater and she has set out her philosophy of “America First antitrust”. Slater’s approach is by no means soft but it relies much more on the enforcement of existing laws than the creation of new regulations and it is open to thoughtful remedies to address competition concerns. However, there have also been allegations that lobbyists have been able to go over the heads of the antitrust division and win favours from the Department of Justice leadership and the White House.
In the UK, similarly, I would not expect a future Conservative or Reform-led government to go soft on enforcement. However, they are likely to favour a shift in how the CMA prioritises its work. In particular, they may be keener on enforcement of consumer protection law (where breaches tend to be more visible to the public and the demands for action swift) than on merger control (where the CMA is protecting consumers from a potential future harm of which they may be blissfully unaware). And they may be more reluctant to create new regulations or give regulators new powers.
But what we can be sure of is that no matter who is in power, the days of regulators being allowed to set their own policy and strategy, without reference to the priorities of the elected government of the day, are over.
REFERENCES
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- Ridley, N., 1992. ‘My Style of Government’: The Thatcher Years. London: Fontana, p. 55
- Young, D., 1990. The Enterprise Years: A Businessman in the Cabinet. London: Headline, p. 267
- Heseltine. M., 2000. Life in the Jungle: My Autobiography. London: Hodder and Stoughton, p. 268
- Heseltine. M., 2012. No Stone Unturned: In Pursuit of Growth. Available at: https://www.gov.uk/government/publications/no-stone-unturned-in-pursuit-of-growth, p. 147
- Wilks, S., 1999. In the Public Interest: Competition Policy and the Monopolies and Mergers Commission. Manchester: Manchester University Press, p. 314
- Ibid., p. 226
- Gibb, N. and R. Peal, 2025. Reforming Lessons: Why English Schools Have Improved Since 2010 and How This Was Achieved. London: Routledge, p. 47
